Failure at CentrePort black eye

Loss of would-be anchor tenant creates can't-do perception

It appears CentrePort -- the quarter-billion-dollar international trade hub planned for lands surrounding Richardson International Airport -- was very close to landing an anchor tenant that would allow it to finally graduate from a promising idea to a driver of economic activity.

BORIS MINKEVICH / WINNIPEG FREE PRESS ARCHIVES

An ongoing concern with CentrePort is it could make undeveloped land in Winnipeg less desirable. Photo Store

Unfortunately, as seems so often to be the case with this file, defeat has been snatched from the jaws of victory.

The project in question, a mammoth data farm to be built by a large but so far unidentified U.S. company, has given up on the idea of building at CentrePort. It is now looking at another location in Manitoba along with an undisclosed U.S. site.

In addition to the very real possibility Manitoba could lose the project altogether, the inability to meet the needs of this tenant is painting a picture of Manitoba in general, and Winnipeg in particular, as dysfunctional jurisdictions that cannot get their collective act together to seize the big deal.

How exactly did the ball get dropped? The barrier to development on CentrePort lands is the absence of water and sewer services. Some of CentrePort's lands are located within city limits, but other lands lie within the RM of Rosser, which could not afford on its own to service those lands. The plan was to have the city extend its water and sewer pipes into neighbouring Rosser. The province offered to cost-share that project -- tagged at $17 million -- on a 50-50 basis. Helluva deal.

Despite its outward support for the project, deep down inside, the city is not a fan of CentrePort. There is an acute concern serviced land at CentrePort would make remaining undeveloped lands inside Winnipeg unattractive. Even so, a tentative agreement was reached in early 2011 to extend water and sewer services pending completion of a more detailed service-sharing contract between the two municipalities.

And then, in September 2011, the city was threatened with legal action by Band No. 39, a northwestern Ontario First Nation located on Shoal Lake, a lake that straddles the Ontario-Manitoba border and is the source of the city's water. The First Nation, subsequently joined in the challenge by Band No. 40, opposed any move by Winnipeg to sell water to neighbouring communities. The case has now caught the attention of the International Joint Commission, an entity that mediates cross-border water disputes. The IJC has demanded more information about any water-sharing deals.

As a result of those threats, the city has said it can only proceed with the extension of sewer lines to Rosser. Unfortunately, given the types of businesses envisioned for CentrePort, the big need is water, largely for fire suppression. According to CentrePort officials, sewer alone is no help at all. In billiards, they call that a snooker.

It's not advisable to take any legal threat lightly. However, sources in other levels of government and many in the private sector who have been following this file cannot shake the feeling the city was almost relieved to have an excuse to back away from this project. The skepticism is based on several facts: First, it's not clear the IJC has jurisdiction over this matter; and second, Winnipeg is not using anywhere near the total volume of water granted to it in a 1914 agreement approved by Ontario, Ottawa and, ironically, the aforementioned IJC.

Why would the city seize on the legal challenge to slow down its involvement in CentrePort? The province has passed legislation to create a single planning authority for CentrePort lands. Although each municipality retains property taxes, permit fees and approval of any development, the planning authority creates conditions for expedited approval of projects. It essentially asks the municipalities to agree in advance what is allowed on those lands and fast-tracks approval.

Winnipeg, however, has opposed the model as a loss of planning control. In fact, there has been some suggestion the city would like to have planning control over all CentrePort lands, including those with Rosser.

Regardless of what the city ultimately wants, a most remarkable situation has been created. Winnipeg -- which has yet to make an investment in CentrePort and is only being asked to come up with $8.5 million for service sharing -- is holding up development of a project in which the federal and provincial governments have committed more than $220 million. With no clear moral impetus to fall back on, the city is essentially holding CentrePort hostage, which makes its biggest proponent, the province, look foolish and weak.

CentrePort was touted as the biggest economic-development project in Manitoba history. It was to be a source of new wealth, investment and employment. At the moment, CentrePort is fast becoming fodder for a less-than-funny, if not telling, joke.

History

Updated on Friday, December 14, 2012 at 7:20 AM CST: replaces photo

10:58 AM: Changes to clarify it's Band 39, not 30.

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